Wednesday, July 14, 2010

It was stated in yesterday's update that sideways consolidation today would be an indication that an impulsive advance larger than wave [ii] is likely underway. After moving lower in the morning hours, a new high was nearly reached today. A lower low followed, but the action since yesterday's high can easily be viewed as a flat.

Unless prices break below today's low, the count will be the more bullish one shown above. This count is a completing [c] wave impulse of flat wave 2 higher. If 1087 is broken, the more bearish alternate count (wave [ii] of 3 complete) will likely become the primary.

One possible impulsive labeling is above. A set of 1-2 waves higher appears to be the best description of the rally. The next best choice is an elimination of some 1st and 2nd waves while still keeping the "3rd of a 3rd" labeling the same. Beyond these options, any other impulsive count higher is possible.

An alternate count for a wave [ii] of 3 peak can be seen above in the 1 minute chart. This is basically the same as this count presented yesterday. Given the breadth, structure, and size of yesterday's gap rally, a "3rd of a 3rd" wave within a larger impulse seems more likely at this time.

Technicals remain overbought. This condition should continue given the wave count.

The change to the larger view is illustrated above, although it does not impact minor wave 1 or earlier waves. Targets for wave 2 vary, but wave [a] of 2 (1131.23) may be broken.

It was stated in yesterday's update that sideways consolidation today would be an indication that an impulsive advance larger than wave [ii] is likely underway. After moving lower in the morning hours, a new high was nearly reached today. A lower low followed, but the action since yesterday's high can easily be viewed as a flat.

Unless prices break below today's low, the count will be the more bullish one shown above. This count is a completing [c] wave impulse of flat wave 2 higher. If 1087 is broken, the more bearish alternate count (wave [ii] of 3 complete) will likely become the primary.

One possible impulsive labeling is above. A set of 1-2 waves higher appears to be the best description of the rally. The next best choice is an elimination of some 1st and 2nd waves while still keeping the "3rd of a 3rd" labeling the same. Beyond these options, any other impulsive count higher is possible.

An alternate count for a wave [ii] of 3 peak can be seen above in the 1 minute chart. This is basically the same as this count presented yesterday. Given the breadth, structure, and size of yesterday's gap rally, a "3rd of a 3rd" wave within a larger impulse seems more likely at this time.

Technicals remain overbought. This condition should continue given the wave count.

The change to the larger view is illustrated above, although it does not impact minor wave 1 or earlier waves. Targets for wave 2 vary, but wave [a] of 2 (1131.23) may be broken.

My trading philosophy is 95% based on my own Elliott Wave analysis of the S&P 500. I try to keep my analysis and trading as simple as possible and do not use trend lines, channels, or definite retracement, price, or time targets. To me, inspecting the proportionality and symmetry of a market's price structure is the key to mastering the principle; it is through this that low-risk, high-reward trading opportunities are found.

Because they are the only things I look at when trading, the quality of the charts I post on this blog are very important to me. I think you will find my work to be the best Elliott Wave analysis of the S&P 500 on the internet.